Discrimination By Homeowners’ Associations

Most people alive today were born after the Civil Rights Movement of the 1950s and 1960s. We may be inclined to take for granted that civil rights are so engrained in our society that racial discrimination is only a thing of the past. Yet, cases still come up in Washington where racial discrimination is at issue. In the 1950s, the Washington State Legislature enacted what is now known as the Washington Law Against Discrimination (“WLAD”), codified at RCW chapter 49.60. That law makes it unlawful to discriminate against persons based upon their belonging to a protected class, which includes “race, creed, color, national origin, citizenship or immigration status, families with children, sex, marital status, sexual orientation, age, honorably discharged veteran or military status, or the presence of any sensory, mental, or physical disability or the use of a trained dog guide or service animal by a person with a disability.” The law does not prevent all such discrimination; rather, it prohibits discrimination “in employment, in credit and insurance transactions, in places of public resort, accommodation, or amusement, and in real property transactions.” WLAD establishes the Washington State Human Rights Commission (“HRC”) to enforce the statute.

Racial discrimination in real estate transactions has a longstanding history in the United States. Particularly prior to leading up into the Civil Rights Era, racial segregation occurred in housing, not always through government action, but more frequently through private industry practices. Typical examples included property owners refusing to rent or sell to persons of a particular race, real estate brokers “steering” prospective buyers towards certain neighborhoods based upon race, and lenders applying more restrictive underwriting standards to certain borrowers based upon race. In many areas of the country, neighborhoods would enact racially restrictive covenants, restricting ownership based upon race. Such practices have long been unlawful. But what about the way an HOA enforces covenants which are not inherently discriminary?

In a recent published case, Washington State Human Rights Commission v. Summerwalk Homeowners Association, et al. (“Summerwalk”), Division II of the Washington State Court of Appeals addressed the scope of the “real property transactions” language of the law in the context of HOAs. There, a homeowner within an HOA, Mitchell, purchased a townhome in 2020. A few months later, he made a complaint with the HRC, alleging that the HOA was discriminating against him on the basis of race through its enforcement of its covenants, conditions, and restrictions (“CC&Rs”). The HRC found reasonable cause that such discrimination had occurred, and the HRC thereafter filed a complaint with the Office of Administrative Hearings (“OAH”). However, the OAH dismissed the complaint on the ground that it did not believe it had jurisdiction because the alleged discriminatory action was not a real estate transaction and therefore fell outside the scope of WLAD. The Court looked to the statutory definition of “real estate transaction” as one that “includes the sale, appraisal, brokering, exchange, purchase, rental, or lease of real property, transacting or applying for a real estate loan, or the provision of brokerage services.” However, the Court held that such a list is merely “illustrative, but not exclusive.” The Court noted that WLAD makes it unlawful for any person “[t]o discriminate against a person in the terms, conditions, or privileges of a real estate transaction or in the furnishing of facilities or services in connection therewith.” Given the long held importance of WLAD, the Court construed its provisions liberally, and held that an HOA’s enforcement of CC&Rs falls within WLAD, and the OAH therefore had jurisdiction to hear and decide the HRC’s complaint against the HOA. The Court rejected the HOA’s contention that WLAD “does not reach beyond the acquisition of the property” and “does not reach subsequent use of the property.”

The lesson from Summerwalk is that HOAs must consider themselves bound by WLAD and must be careful to avoid not only actual racial discrimination, but the appearance of it.

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